Issue of shares for consideration otherwise than in cash

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Hi Members!!!

A company has accumulated the remuneration of its directors resulting into the credit balance of directors in the books of the company. Now the company wants to allot shares to its directors against such accumulated remuneration i.e. issue of shares for consideration otherwise than in cash.

I want to know the relevant procedures in this regard.

Thanks.

Replies (3)

Conduct a Board Meeting get approval at the board meeting and file Form No 2 (If the increase is within authorised capital)

If authorise capital is to be increased then convene EGM get the authorised capital increased ammend MOA (ordinary resolution ) and file form No 5 and then repeat the above mentioned procedure

regards

 

kedar

 

 

Thankyou for your reply sir...

The increase is withing the limit of authorised share capital.

I want to know whether form 3 is required to be filed for the same or not.

Thanks..

It is not a case of issue of shares for consideration other than cash.  Hence Form 2 needs to be filed. 

 

The situation would have been different if the Board would have decided at the time of appointment of the directors to issue shares against their services in lieu of remuneration.

 

 

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